ITO 20(2)3, MUMBAI V. OM TRINETRI BUILDERS & CONTRACTORS, MUMBAI

ITA 2741/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79450 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 08-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRIKANT NAMDEO
• Keywords: Retrospective amendment
• Section: 133A; 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'C' BENCH, MUMBAI BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO. 2741/MUM/2013 (ASSESSMENT YEAR:2008-09) INCOME TAX OFFICER - 20(2)(3) PIRAMAL CHAMBER ROOM NO.411, 4 TH FLOOR, LALBAUG, PAREL MUMBAI-400 012. VS. M/S. OM TRINETRI BUILDERS AND CONTRACTORS 7/14, UNITED CHS, KOLDONGRI ANDHERI (E) MUMBAI-400 069. (APPELLANT) (RESPONDENT) P ERMANENT ACCOUNT N O. : AAFO 3 066 E ASSESSEE BY : MS. VINITA SHAH REVENUE BY : SHRI SHRIKANT NAMDEO DATE OF HEARING : 10/07/2014 DATE OF PRONOUNCEMENT : 18/07/2014 O R D E R PER VIJAY PAL RAO, JUDICIAL MEMBER: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 29/01/2013 OF CIT(A) FOR THE ASSESSMENT YEAR 2008-0 9. REVENUE HAS RAISED THE FOLLOWING GROUNDS:- 1. THE LD. CIT(A) HAS ERRED ON THE FACTS AND CIRCU MSTANCES OF THE CASE AND IN LAW IN DIRECTING THE AO TO ALLOW DEDUCT ION U/S. 80IB(10) AMOUNTING TO RS.16,37,770/- 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED ON NOT CONSIDERING THAT THE ASSESS EE HAS NOT FULFILLED THE CONDITIONS PRESCRIBED IN SECTION 80IB THAT THE BUILT UP AREA OF UNIT SHOULD NOT EXCEED 1000 SQ.FT. 3. THE CIT(A) HAS IGNORED IN IGNORING THE FACT THA T A SURVEY U/S. 133A WAS CARRIED OUT IN THE CASE WHEREIN AFTER PHYS ICAL VERIFICATION IT WAS NOTICED THAT CERTAIN FLATS SOLD WERE EXCEEDING 1000 SQ.FT. AREA THEREBY VIOLATING THE CONDITION LA ID DOWN IN THE SECTION 80IB OF THE ACT. ITA NO.2741/M/2013 AY: 2008-09 2 4. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A ) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF AO BE RESTORED. 2. THE ONLY ISSUE RAISED BY THE REVENUE IS REGARDIN G ALLOWING THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) DESPITE T HE FACT THAT THE ASSESSEE SOLD TWO COMBINED UNITS TO ONE PURCHASER T HEREBY EXCEEDING THE AREA OF 1000 SQ.FT. 3. WE HAVE HEARD THE LD. DR AS WELL AS THE LD. AR A ND CONSIDERED THE RELEVANT MATERIAL ON RECORD. 4. AT THE OUTSET IT WAS SUBMITTED BY THE LD. AR OF THE ASSESSEE THAT AN IDENTICAL ISSUE HAS BEEN CONSIDERED AND DECIDED BY THIS TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2006-07 AND 2007-08 VIDE ORDER DATED 05/05/2012 IN ITA NO.7147 & 48/MUM/2010 IN PARA-5 TO 7 AS UNDER:- 5. WE HAVE HEARD THE RIVAL SUBMISSIONS. AS FAR AS APPROVAL OF THE SLUM REHABILITATION AUTHORITY IS CONCERNED WE F IND THAT CBDT HAS ISSUED A NOTIFICATION DATED 3/8/10, WHEREBY IT IS NOW NOTIFIED THAT ANY SCHEME APPROVED UNDER REGULATION 33(10) OF DCR FOR GREATER MUMBAI 1991, AND BY THE SRE FOR SLUM REHABI LITATION WOULD BE VALID FOR THE PURPOSE OF CLAUSE- A AND B O F SECTION 80 IB (10) OF THE ACT. WE ARE OF THE VIEW THAT IT WOULD BE APPROPRIATE TO SET ASIDE THE ORDER OF THE CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE AO FOR CONSIDERATION OF THE ISSUE AFRESH IN THE LIGHT OF THE NOTIFICATION ISSUED BY THE CBDT. 6. AS FAR AS THE INDIVIDUAL FLATS EXCEEDING THE B UILT UP AREA OF MORE THAN 1000 SQ. FT. IS CONCERNED WE FIND THAT T HE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF EMGEE HOLDING PVT. LTD. VS. DCIT, (2011) 12 TAXMAN.COM 468 (MUM) HAS HELD AS FO LLOWS: IT WAS NOTED THAT THE SIZE OF EACH FIAT, AS EVID ENT FROM BUILDING PLAN AS DULY APPROVED BY MUNICIPAL AUTHORI TIES, WAS LESS THAN 1,000 SQ. FT. IT WAS NOT EVEN REVENUE S CASE THAT EACH OF FLAT ON STAND ALONE BASIS WAS NOT A RE SIDENTIAL UNIT. EVEN FLATS WERE CONSTRUCTED OR PLANNED IN SUC H A WAY THAT TWO FLATS COULD INDEED BE MERGED INTO ONE LARG ER UNIT, AS LONG EACH FLAT WAS AN INDEPENDENT RESIDENTIAL UNIT, DEDUCTION UNDER SECTION 80-LB (10) COULD NOT BE DECLINED. WHA T SECTION 80-LB (10) REFERS TO IS RESIDENTIAL UNIT AND IN T HE ABSENCE OF ITA NO.2741/M/2013 AY: 2008-09 3 ANYTHING TO THE CONTRARY IN THE ACT, THE EXPRESSION RESIDENTIAL UNITS MUST HAVE THE SAME CONNOTATIONS AS ASSIGNED TO IT BY LOCAL AUTHORITIES GRANTING APPROV AL TO THE PROJECT. THE LOCAL AUTHORITY HAD APPROVED THE BUILD ING PLAN WITH RESIDENTIAL UNITS OF LESS THAN 1,000 SQ.FI. AN D GRANTED COMPLETION CERTIFICATE AS SUCH. THERE WAS NO AMBIGU ITY ABOUT THE FACTUAL POSITION. FURTHER, THE PROHIBITION AGAI NST SALE OF MORE THAN ONE FLAT IN A HOUSING PROJECT TO MEMBERS OF A FAMILY HAS BEEN INSERTED SPECIFICALLY WITH EFFECT F ROM 1-4- 2010 AND, SAID AMENDMENT IN LAW CAN ONLY BE TREATED AS PROSPECTIVE IN EFFECT. SO FAR AS PRE-AMENDMENT POSI TION IS CONCERNED, AS LONG AS RESIDENTIAL UNIT HAS LESS T HAN SPECIFIED AREA, IS AS PER THE DULY APPROVED PLANS AND IS CAPABLE OF BEING USED FOR RESIDENTIAL PURPOSES ON S TAND ALONE BASIS, DEDUCTION UNDER SECTION 80-IB(10) CANN OT BE DECLINED IN RESPECT OF THE SAME MERELY BECAUSE THE END USER, BY BUYING MORE THAN ONE SUCH UNIT IN THE NAM E OF FAMILY MEMBERS, HAS MERGED THESE RESIDENTIAL UNITS INTO A LARGER RESIDENTIAL UNIT OF A SIZE WHICH IS IN EXCES S OF SPECIFIED SIZE. IT IS USEFUL TO TAKE NOTE OF LEGISLATIVE AM ENDMENT BY VIRTUE OF WHICH THE LEGISLATURE PUT CERTAIN RESTRIC TIONS ON SALE OF RESIDENTIAL UNITS TO CERTAIN FAMILY MEMBERS OF A PERSON WHO HAS BEEN SOLD A RESIDENTIAL UNIT IN THE HOUSING PROJECT. SECTION 80-IB(10) NOW PROVIDES AN ADDITIONAL ELIGIB ILITY CONDITION THAT IN A CASE WHERE A RESIDENTIAL UNIT I N THE HOUSING PROJECT IS ALLOTTED TO ANY PERSON BEING AN INDIVIDUAL, NO OTHER RESIDENTIAL UNIT IN SUCH HOUSING PROJECT I S ALLOTTED TO ANY OF THE FOLLOWING PERSON, NAMELY (1) THE INDIVID UAL OR THE SPOUSE, OR THE MINOR CHILDREN OF SUCH INDIVIDUAL, ( II) THE HUF IN WHICH SUCH INDIVIDUAL, IS A KARTA (III) ANY PER SON REPRESENTING SUCH INDIVIDUAL THE SPOUSE OR MINOR CH ILDREN OF SUCH INDIVIDUAL, OR THE HUF IN WHICH SUCH INDIVIDUA L IS A KARTA. [PARA 7] IT IS CLEAR THAT THE AMENDMENT HAS BEEN BROUGHT WIT H PROSPECTIVE EFFECT FROM 1-4-2010, AND THERE IS NO I NDICATION WHATSOEVER TO SUGGEST THAT THESE RESTRICTIONS NEED TO BE APPLIED WITH RETROSPECTIVE EFFECT. THE AMENDMENT SE EKS TO PLUG A LOOPHOLE BUT RESTRICTS THE REMEDY WITH EFFEC T FROM 1-4- 2010, I.E., ASSESSMENT YEAR 2010-11. THE LAW IS VER Y CLEAR THAT UNLESS PROVIDED IN THE STATUTE, THE LAW IS ALW AYS PRESUMED TO BE PROSPECTIVE IN NATURE. IT WILL, THER EFORE, BE CONTRARY OF THE SCHEME OF LAW TO PROCEED ON THE BAS IS THAT WHEREVER ADJACENT RESIDENTIAL UNITS ARE SOLD TO FAM ILY MEMBERS, ALL THESE RESIDENTIAL UNITS ARE TO BE CONS IDERED AS ONE UNIT. IF LAW PERMITTED SO, THERE WAS NO NEED OF THE INSERTION OF CLAUSE (F) TO SECTION UNDER SECTION 80 -LB (1 0) IT WILL BE UNREASONABLE TO PROCEED ON THE BASIS THAT L EGISLATIVE AMENDMENT WAS INFRUCTUOUS OR UNCALLED FOR - PARTICU LARLY AS THE AMENDMENT IS NOT EVEN STATED TO BE FOR REMOVAL OF ITA NO.2741/M/2013 AY: 2008-09 4 DOUBTS: ON THE CONTRARY, THIS AMENDMENT SHOWS THAT NO SUCH ELIGIBILITY CONDITIONS COULD BE READ INTO PRE- AMENDMENT LEGAL POSITION. [PARA 8] IN VIEW OF AFORESAID DISCUSSION, THE DEDUCTION UNDE R SECTION 80-LB(10) WAS TO BE ALLOWED TO THE ASSESSEE ENTIREL Y. [PARA 9) 7. IN THE PRESENT CASE ADMITTEDLY THE AMENDED PROV ISIONS OF LAW WILL NOT APPLY AND, THEREFORE, SO LONG AS PER THE P LANS APPROVED BY THE CONCERNED AUTHORITIES, THE BUILT UP AREA OF E ACH FLAT IS LESS THAN 1000 SQ.FT. THE DEDUCTION UNDER SECTION 80IB(1 0) OF THE ACT CANNOT BE DENIED TO THE ASSESSEE ON THE GROUND THAT TWO FLATS AS PER APPROVED PLAN LYING ADJACENT TO EACH OTHER HAVE BEEN COMBINED INTO ONE FLAT AND OWNED BY ONE OWNER OR JO INTLY WITH SOME OF THE MEMBERS OF HIS FAMILY. IN THIS REGARD WE ALSO FIND FROM THE APPROVED PLAN COPY OF WHICH IS AT PAGE 66 OF THE PAPER BOOK THAT AS PER THE APPROVAL THE BUILT UP AREA OF EACH FLAT IS LESS THAN 1000 SQ.FT. IN THE CIRCUMSTANCES WE HOLD THAT THE REJECTION OF THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SE CTION 80 IB(10) ON THIS ACCOUNT CANNOT BE SUSTAINED. 5. THERE IS NO DISPUTE THAT THERE IS NO CHANGE IN T HE FACTS RELEVANT TO THE ISSUE UNDER CONSIDERATION FOR THIS ASSESSMENT Y EAR AS WELL AS FOR THE ASSESSMENT YEARS 2006-07 AND 2007-08. CIT(A) HAS AL LOWED THE CLAIM OF THE ASSESSEE BY FOLLOWING THE ORDER OF THIS TRIBUNA L IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2006-07. ACCORDINGLY F OLLOWING THE ORDER OF THIS TRIBUNAL IN ASSESSES OWN CASE WE DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 6. IN THE RESULT, APPEAL OF THE REVENUE STANDS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH JULY, 2014. SD/- SD/- (D. KARUNAKARA RAO) ACCOUNTANT MEMBER (VIJAY PAL RAO ) JUDICIAL MEMBER MUMBAI, DATED: 18/07/2014. JV. ITA NO.2741/M/2013 AY: 2008-09 5 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.